Overview

Because Fair Market Rents (FMRs) are calculated on a regional scale, HUD payment standards do not always reflect the actual rent in all areas of the region. While low-income neighborhoods may have an average FMR well below the regional FMR, high-opportunity, low-poverty areas often have much higher rents than the permitted standard.

While a change to HUD rules would be ideal (and is under consideration by HUD), public housing authorities (PHAs) have found a number of ways to work around this barrier. PHAs are permitted to assign a payment standard from 90 to 110 percent of FMR to different areas without HUD approval. Housing authorities can also request exception standards from HUD in order to account for much higher rent areas in the region.

Case Studies

Choice Communities (San Diego)

In 2010, San Diego’s housing authority, the San Diego Housing Commission (SDHC), initiated the Choice Communities program, a project to assist voucher holders in moving to higher-opportunity neighborhoods. The program designates nine “choice communities” and provides educational packets to help voucher holders make informed decisions about their moves. A significant success factor in the program is its flexible payment standards. The Housing Commission sets the maximum rent subsidy for Choice Communities 20 percent higher than the city’s current payment standards.

Because rent is higher in these neighborhoods, the Commission also allows participants to pay up to 50 percent of their income in rent. While this does add an extra cost burden on the voucher holder, the increase has opened more rental opportunities to participants and allows them to make informed trade-offs at their own discretion. Flexible payment standards and rent burden levels, along with the Commission’s Achievement Academy Program—which offers a number of educational services and workshops to voucher holders—have allowed SDHC to assist over 260 families in moving from high- and medium-poverty areas into higher-opportunity areas.

The San Diego Housing Commission is a participant in HUD’s Moving to Work demonstration and therefore operates with greater flexibility than typical housing authorities. Most housing authorities can only permit participants to pay up to 40 percent of their income toward rent and must make a request to HUD for targeted payment standards that exceed 110 percent.

For more information:

Jessica Adamo, San Diego Housing Commission
Email: [email protected]